Who will be the next Prime Minister of Israel after the next election?

A Political Landscape in Flux

Israel's political scene has been one of the most volatile in the democratic world, cycling through five elections between 2019 and 2022 alone. Now, as the country navigates the aftermath of the October 7 attacks and an extended military campaign in Gaza, the question of who will lead Israel after its next election has become one of the most closely watched political markets globally.

Prediction markets offer a unique lens into how informed traders are evaluating the candidates, coalition dynamics, and broader political currents shaping this race.

The Incumbent: Benjamin Netanyahu

Benjamin Netanyahu remains the dominant figure in Israeli politics. The longest-serving Prime Minister in the nation's history, Netanyahu has led Likud through multiple electoral cycles and has consistently defied predictions of his political demise.

However, his position is more precarious than it has been in years. The October 7 intelligence and security failures occurred on his watch, and his coalition — which includes far-right partners like Itamar Ben Gvir and Bezalel Smotrich — has drawn criticism both domestically and internationally.

Factor	Impact on Netanyahu
Security record post-Oct 7	Negative — Erosion of "Mr. Security" brand
Coalition stability	Mixed — Far-right allies both strengthen and constrain
Ongoing corruption trial	Negative — Continues to shadow his leadership
Likud base loyalty	Positive — Core supporters remain firmly behind him
Opposition fragmentation	Positive — No single challenger has unified the anti-Bibi bloc

Despite the headwinds, prediction markets have historically been cautious about counting Netanyahu out. Traders who bet against him in 2020 and 2021 learned expensive lessons.

The Challengers

Benny Gantz has emerged as the most formidable alternative in recent polling. The former Defense Minister and IDF Chief of Staff saw his approval ratings surge during the war, positioning himself as a centrist security hawk who can appeal to both moderate right and center-left voters. In many prediction markets, Gantz trades as the leading alternative to Netanyahu.

Yair Lapid, leader of Yesh Atid and former Prime Minister during the 2022 rotation government, remains a significant factor. However, his support has softened relative to Gantz, and traders appear to view him as more likely to play a coalition role than lead one.

Naftali Bennett, despite officially stepping back from politics, continues to poll surprisingly well. His potential return to the race is a wildcard that prediction markets must account for — a classic example of how "probability of entry" itself becomes a tradeable variable.

Key Market Insight: The fragmentation of Israel's opposition means that even a weakened Netanyahu could form a government if his rivals fail to coalesce. Prediction markets tend to weight coalition math as heavily as raw polling numbers.

What Prediction Markets Are Telling Us

Traders evaluating this market must grapple with several unique dynamics that make Israeli elections particularly challenging to forecast:

1. Coalition arithmetic matters more than vote share. Israel's proportional representation system means a party winning 25% of seats can still lead the government if it builds a 61-seat coalition in the 120-seat Knesset.
2. Election timing is uncertain. The current Knesset term runs through 2026, but early elections could be triggered by coalition collapse, making the "when" almost as important as the "who."
3. Polling in Israel has a mixed track record. Final seat allocations have frequently surprised analysts, and small shifts can dramatically alter coalition possibilities.
4. External events are highly influential. Regional security developments, hostage negotiations, and international diplomatic pressure can shift the landscape overnight.

How to Approach This Market

For prediction market traders, Israeli political markets offer both opportunity and risk. The key is to avoid anchoring too heavily on any single data point — whether it's a poll, a headline, or a historical pattern.

Some practical considerations:

• Monitor coalition scenarios, not just top-line polls. A candidate polling at 20% with clear coalition partners may be more likely to become PM than one polling at 25% without them.
• Watch for Bennett's re-entry. His return could reshape the entire market, pulling votes from both Netanyahu and Gantz.
• Factor in the trial timeline. A conviction or plea deal in Netanyahu's corruption case could be the single most market-moving event.
• Track U.S.-Israel relations. American political dynamics, particularly around military aid and diplomatic support, can influence Israeli domestic politics in unexpected ways.

The Bottom Line

Israel's next Prime Minister race is a masterclass in political complexity. Netanyahu remains the most likely single outcome in most prediction markets, but the probability is far from dominant. Gantz represents the strongest alternative, with Bennett as a high-impact wildcard. For traders, this is a market that rewards patience, nuance, and a deep understanding of coalition politics over simple horse-race analysis.